Pacific Biosciences of California (NASDAQ:PACB) was in 7 hedge funds' portfolio at the end of the first quarter of 2013. PACB investors should be aware of a decrease in hedge fund interest in recent months. There were 7 hedge funds in our database with PACB positions at the end of the previous quarter.
To most traders, hedge funds are seen as worthless, old financial tools of yesteryear. While there are greater than 8000 funds in operation at present, we hone in on the elite of this group, about 450 funds. Most estimates calculate that this group oversees most of the smart money's total asset base, and by monitoring their top investments, we have spotted a number of investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we've began to sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Just as integral, bullish insider trading sentiment is a second way to break down the financial markets. Obviously, there are many stimuli for an executive to downsize shares of his or her company, but only one, very simple reason why they would behave bullishly. Various empirical studies have demonstrated the impressive potential of this tactic if shareholders know what to do (learn more here).
With these "truths" under our belt, we're going to take a gander at the recent action encompassing Pacific Biosciences of California (NASDAQ:PACB).
Heading into Q2, a total of 7 of the hedge funds we track were bullish in this stock, a change of 0% from the first quarter. With hedgies' capital changing hands, there exists a select group of notable hedge fund managers who were upping their stakes substantially.
Of the funds we track, James E. Flynn's Deerfield Management had the largest position in Pacific Biosciences of California (NASDAQ:PACB), worth close to $12.2 million, accounting for 0.7% of its total 13F portfolio. Sitting at the No. 2 spot is Maverick Capital, managed by Lee Ainslie, which held a $8.8 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other peers that are bullish include Jacob Gottlieb's Visium Asset Management, Jim Simons's Renaissance Technologies and D. E. Shaw's D E Shaw.
Judging by the fact that Pacific Biosciences of California (NASDAQ:PACB) has experienced bearish sentiment from the smart money, it's easy to see that there exists a select few funds that decided to sell off their full holdings last quarter. It's worth mentioning that Mark Broach's Manatuck Hill Partners said goodbye to the biggest investment of the 450+ funds we track, valued at about $0.9 million in stock.. Joseph Edelman's fund, Perceptive Advisors, also cut its stock, about $0.1 million worth. These moves are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Insider purchases made by high-level executives is most useful when the company in focus has experienced transactions within the past six months. Over the latest six-month time frame, Pacific Biosciences of California (NASDAQ:PACB) has experienced 1 unique insiders buying, and zero insider sales (see the details of insider trades here).
Let's also take a look at hedge fund and insider activity in other stocks similar to Pacific Biosciences of California (NASDAQ:PACB). These stocks are ZIOPHARM Oncology Inc. (NASDAQ:ZIOP), Chelsea Therapeutics International Ltd. (NASDAQ:CHTP), Geron Corporation (NASDAQ:GERN), ImmunoCellular Therapeutics Ltd (NYSEAMEX:IMUC), and Targacept, Inc. (NASDAQ:TRGT). This group of stocks belong to the biotechnology industry and their market caps are closest to PACB's market cap.